While that remains to be disproven in the next, and final, central-planner driven market crash, we now know that it is not only precious metals that are on the vaporization chopping block: when it comes to China, such simple assets as simple steel held in inventories, apparently do not exist.

We now know that this has been happening in China with the most critical component of its economic growth miracle: steel. We will soon discover that all other assets: stocks, bonds, commodities (including gold and silver) and finally cash (think deposits) have been comparably rehypothecated and criminally commingled. The end result will be the most epic bank run in world history, which incidentally is precisely what the central banks are attempting desperately to delay as much as possible by generating excess inflation to “inflate” away the debt, leading to rematching of finite assets and virtually infinite liabilities. Alas, in a world in which credit-money liabilities are in the quadrillions, and in which the real assets are in the tens of trillions, only hyperinflation can seal the deal.

“Precious metals are financial assets like currencies, T-bills, and T-bonds; they trade in the multiples of a hundred times the underlying physical”

But what does this mean to your 1 ounce of Gold? It is real, it’s in your hand and it’s not borrowed against.

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Time and price cannot be projected because we don’t know how much “fake Gold” is out there.

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Forget about nominal or Dollar terms, what is in store in my opinion is the point in time when Gold and Silver reclaim their monetary thrones. At this point, “money” will be very scarce. “Stuff”, like buildings, cars, stocks, bonds, currencies and I-Pods will be plentiful as they were all over created with the help of too much credit. It will take “a lot” LESS metal to purchase these things in the future.